REDD projects – the money story

May 10, 2017

I’ve now visited two Plan Vivo REDD projects, both within the Nakau Programme in the South Pacific. On Vanuatu, the clan responsible for the Loru project presented their “money story.” This excellent visual representation, with tanks for cash flows, showed where each Vatu (the local currency) of income from sales of carbon credits has gone. Financial transparency is a key feature of Plan Vivo projects, and this is especially important in REDD projects, since the preservation of trees can seem less tangible than tree-planting.


REDD stands for “Reducing emissions from deforestation and degradation” and this is relevant for developing countries in tropical or sub-tropical areas. The aim of REDD is to incentivise countries or communities to preserve their forests.


To incentivise a community to preserve their forest, the forest has to have more value to the community when standing that when cut down. For communities in developing countries, often smallholders and subsistence farmers, this incentive has to be financial ie the communities need to be recompensed for the opportunity cost of not selling their trees.


In the Plan Vivo REDD projects on Vanuatu and Fiji, the land is owned by indigenous clans, living in simple villages. The clans receive money from the sale of carbon credits, as compensation for not selling their trees, and the clans decide how to spend this money. With average daily incomes of 5-15 USD the people in the communities of the Loru and Drawa projects spend REDD income on basics like school fees, food and building materials.


But covering the opportunity cost of not selling trees is not the only project cost. The Plan Vivo REDD projects on Vanuatu and Fiji also have budgets for expenses incurred in running the projects, including:

-​Writing technical documentation and reports for validation
– Biodiversity surveys
– Creating legal structures for project governance
– Rangers to “police” the land
– Labour to clear invasive vines
– Digital monitoring equipment
– External audits, of the forest and the project operations
– Transport and office supplies

The money story is their way of visualising all the flows of income they receive from buyers of their REDD Plan Vivo carbon credits.